The Fundings and Failing of Hyperloop One

Hyperloop One (aka Virgin Hyperloop or Virgin Hyperloop One) was an American transportation technology company that worked to commercialize the high-speed travel concept called the Hyperloop, a variant of the vacuum train.

Hyperloop One had raised $450 million to develop a hypersonic train concept. The high speed vacuum train concept was originally by Elon Musk but Billionaire Richard Branson funded Hyperloop One and others created Hyperloop startups. Elon Musk was not part of this company.

On December 21, 2023, Bloomberg reported that Hyperloop would shut down, primarily due to its failure to secure any contracts for building a working hyperloop system, alongside selling its assets and laying off remaining employees.

The recent plans for a version of vacuum train called Hyperloop emerged from a conversation between Elon Musk and Iranian-American Silicon Valley investor Shervin Pishevar when they were flying together to Cuba on a humanitarian mission in January 2012. Pishevar asked Musk to elaborate on his hyperloop idea, which the industrialist had been mulling over for some time. Pishevar suggested using it for cargo, an idea Musk hadn’t considered, but he did say he was considering open-sourcing the concept because he was too busy running SpaceX and Tesla. Pishevar pushed Musk to publish his ideas about the hyperloop, so that Pishevar could study them.

On August 12, 2013, Musk released the Hyperloop Alpha white paper. In the months that followed Pishevar incorporated Hyperloop Technologies, which would later be renamed Hyperloop One, and recruited the first board members, including David O. Sacks, Jim Messina and Joe Lonsdale. Pishevar also recruited a cofounder, former SpaceX engineer Brogan Bambrogan. The firm set up shop in Bambrogan’s garage in Los Angeles in November 2014. By January 2015, the firm had raised $9 million in venture capital from Pishevar’s Sherpa Capital and investors such as Formation 8 and Zhen Fund, and was able to move into its current campus in the Los Angeles Arts District.

They raised $37 million in financing to date and was completing a Series B round of $80m which they closed on in May 2016. In October 2016, the firm announced that it had raised another $50 million, led by an investment from DP World.

The propulsion open-air test or POAT, was successfully held in North Las Vegas on May 11, 2016. The POAT sled accelerated to 134 mph (216 km/h) in 2.3 seconds, representing a crucial proof of concept. The renamed Hyperloop One announced it had secured partnerships with global engineering and design firms such as AECOM, SYSTRA, Arup, Deutsche Bahn, General Electric, and Bjarke Ingels.

The XP-1 demo pod set the world’s speed record again during the test in December 2017, reaching 387 kilometres per hour (240 mph). With that test, the company also demonstrated its airlock technology that allowed the pod to be transferred into the depressurized tube. With this system, XP-1 pod can be put in an airlock which takes a few minutes to depressurize before entering the already depressurized tube. The pod would need to enter the tube and wait for the 4-hour depressurization of the entire test tube.

On November 10, 2016, Hyperloop One released its first system designs in collaboration with the Bjarke Ingels Group.

On October 12, 2017, Hyperloop One and the Virgin Group announced that it developed a strategic partnership, resulting in Richard Branson joining the board of directors. The global strategic partnership will focus on passenger and mixed-use cargo service in addition to the creation of a new passenger division. Subsequently, Hyperloop One was renamed Virgin Hyperloop One, and Branson became the chairman of the board of directors.